Residential Marketing Solutions

What is the Difference Between a Buyer’s Agent and a Seller’s Agent? 

What is the Difference Between a Buyer’s Agent and a Seller’s Agent? 

Navigating the real estate world can feel overwhelming, especially if you’re new to buying or selling a home. It’s important to understand the roles of the professionals that help you throughout the process. While most people understand the roles of a mortgage broker or loan officer, it can be a little harder to discern the difference between the buyer’s and seller’s agents. Both are licensed real estate professionals but their roles and responsibilities differ depending on who they represent.

Choosing An Agent

Whether you’re buying or selling a home, it’s important to work with an agent you can trust. The agent you choose should have plenty of experience and understand your local market. It’s also important to find an agent that’s easy to communicate with.  Agent’s play a crucial role in making transactions smooth and successful. A good agent will make sure their client is well represented throughout the process.

Buyer’s Agent

The goal of the buyer’s agent is to advocate for the homebuyer’s best interests throughout the buying process. Before hiring a buyer’s agent, you will be asked to sign a Buyer Agent Compensation Agreement or BRBC form, which is required by the California Association of Realtors.  This agreement essentially “hires” the agent for an agreed upon fee to help them find and purchase a home.  Once hired, the buyer’s agent curates a list of properties based on the homebuyer’s preferences including budget, location, and space requirements. Once the homebuyer decides on a property, the buyer’s agent prepares the offer with the terms specified by the buyer. They help negotiate with the seller or seller’s agent to get the best price and terms possible for the homebuyer.

The buyer’s agent assists with all parts of the buying process from negotiating with the seller’s agent to ensuring the buyer accurately completes and understands all paperwork.

Seller’s Agent

A seller’s agent, sometimes called a listing agent, helps the seller market their property, attract buyers, and secure the best terms of sale. The seller’s agent helps a seller determine the best asking price by providing a Comparative Market Analysis of the local area’s recent sales.  Pricing a home correctly is vital to attract local buyers while maximizing profit for the seller. The seller’s agent assists with marketing the property and provides advice on staging and best practices for online listings and open houses. They make sure the property gets as much exposure as possible.

The seller’s agent helps screen potential buyers to ensure they are financially capable of purchasing the property. They negotiate terms with the buyer’s agent, and oversee the paperwork and deadlines to ensure a smooth closing process.

Is It Possible for One Agent To Do Both?

While it is possible for one agent to act as both the buyer’s and seller’s agent, this isn’t always beneficial for all parties. A dual agent must remain neutral, making it difficult to properly advocate on either party’s behalf. This can lead to less than favorable results for both the buyer and the seller.

Referring Agent

In a new home purchase, a buyer’s agent will act as a referring agent.  They will help buyers to locate properties that may work with their budget and their desired wish list, some resale and possibly new homes.  When a buyer purchases a new home, the agent that helped them find it may receive a referral fee to offset from the builder/seller that is credited toward the agreed compensation signed within the Buyer Agent Compensation Agreement or BRBC.

A referring agent is not a party to the sales transaction, nor do they have any requirements tied to Real Estate Agency.  The new home sales representative plays that role in the purchase transaction.  This is due to the specialized forms and disclosures that come with a new home rather than a used, resale home.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

 

2024 Changes to California’s Home Insurance Market

2024 Changes to California’s Home Insurance Market

With nearly 40 million residents and a homeownership rate of 55.8%, California boasts one of the largest and most dynamic real estate markets in the United States. However, recent shifts in the home insurance landscape have raised concerns among current and prospective homeowners. Despite these changes, there are still reasons to be optimistic about purchasing a home in California.

Understanding the Current Situation

Over the past year, several major insurers announced limitations on new homeowners’ policies, citing factors including wildfire risk, rising construction costs, and reinsurance premiums. These changes have left many homeowners wondering about the availability and affordability of insurance coverage.

2022
Allstate and State Farm Insurance pause writing new homeowners’ policies in response to increasing costs.

2023
Farmers Insurance and Safeco announce limitations on new policies, while the USAA tightens wildfire and safety standards.

2024
The Hartford, American National, and State Farm announce non-renewals or policy cancellations, reflecting ongoing challenges in the market.

Moving Forward

The recent news of major insurers limiting or pausing the writing of new home insurance policies can understandably create anxiety for homeowners across the state. However, there are safeguards in place to protect certain homeowners from policy non-renewals. For example, the California Department of Insurance ensures that if residents live in a wildfire-prone area, their insurer cannot issue a cancellation or nonrenewal for one year following a governor-declared state of emergency. Homeowners can check their eligibility on the California Department of Insurance website.

While homeowners’ insurance changes raise concerns, it’s important to recognize they also present opportunities for innovation and resilience. Initiatives aim to stabilize the market and ensure access to affordable coverage for all. Additionally, new players may enter the market, offering innovative solutions to address evolving risks and the needs of consumers.

Despite the challenges facing California’s home insurance market, it’s still a great time to buy a home. By staying informed about market developments, exploring alternative coverage options, and working with knowledgeable insurance professionals, homeowners can protect their investment and enjoy the many benefits of homeownership in California.

Finding Coverage

New homeowners in California can still find coverage through respected insurers. In fact, over one hundred insurers are actively writing home insurance policies across the state. Allstate announced this year that they may start writing new homeowners’ policies again if the California Department of Insurance approves rule changes like allowing the use of computer programs to estimate future risks when seeking price increases. By taking proactive steps to evaluate needs, prioritize preferences, and gather quotes, California homeowners can navigate the insurance market with confidence and secure the coverage they need.

When seeking coverage, homeowners should evaluate their needs and priorities. Understanding the amount of coverage required based on location-specific risks and assessing personal belongings are crucial steps in determining the appropriate policy type and coverage level.

Making a list of priorities, like affordability or specialty coverage, can help new homeowners narrow down their choices. Once priorities are established, gathering and comparing quotes from multiple insurers can provide insight into costs and coverage options.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

Rent or Buy? An Honest Look at the Real Estate Market

Rent or Buy? An Honest Look at the Real Estate Market

For many people, owning a home is a key part of the American dream. Nearly three-quarters of Americans believe that owning a home is a higher measure of achievement than having a successful career, raising a family, or earning a college degree. According to the National Association of Realtors (NAR), owning a home builds financial security. The net worth of an American homeowner is almost 40 times the net worth of a non-homeowner.

Rental Rates Continue to Rise

According to Fannie Mae, almost 70% of renters would purchase a home if their lease ended now. This makes sense, as rent prices continue to soar in many parts of the country. The average price for a one-bedroom apartment in Southern California is 18% higher than it was last year. Rental price increases will likely continue.

During the pandemic, many landlords had rental rate freezes placed on their properties. These freezes have lifted now, giving landlords the freedom to increase rent prices at will. The University of California Lusk Center for Real Estate predicts continuing rent increases over the next two years.

Is It A Good Time to Buy A Home?

Data suggests the housing market has stabilized. As inflation rates slow, mortgage rates are dropping. Currently, 30-year, fixed-rate mortgage rates average 6.43 percent nationwide. Mortgage rates are even lower for first time homebuyers thanks to mortgage rate discounts instituted by Fannie Mae and Freddie Mac.

Despite the benefits of owning a home, many prospective buyers hesitate due to high interest rates, low home supply, or lack of large downpayment. However, first-time buyers shouldn’t wait. Now is the best time to purchase a home.

Low Down Payments & Greater Chance of Approval

First-time buyers can purchase a home without saving for a 20 percent down payment. In addition to low down payment mortgages, buyers can access down payment assistance through their local housing office.

Getting a mortgage without a big down payment has never been easier. Mortgage lenders recently lowered minimum credit score requirements for FHA, USDA, and VA mortgages. In addition, Congress passed a law to change the way that medical debt is factored into credit scores, raising FICO scores by an average of 22 points.

Low Inventory Will Bring Home Prices Up

Low inventory will likely bring home prices up over the next month and into next season. According to NAR, each state averages less than 20,000 homes for sale each year despite high demand. 57% of homes listed for sale in the U.S. are sold within a month. The supply of existing homes for sale is 2.6 months nationwide. Prospective buyers should act fast to ensure the best price.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

 

 

Will Home Prices Go Down?

Will Home Prices Go Down?

Analysts, home shoppers, renters, homeowners are all wondering whether home prices will reduce at the same margin that costs to build go up.  There are conflicting answers however. Looking closely at housing demand we see the need increasing, not decreasing.   With rent, land and the cost of construction going up, it’s hard to say “no” to owning a home today.  When asked if rent will increase over the next 7 years, you will have a hard time finding someone that would say “the cost to rent will be lower”.

In seven years, home prices will not be lower from today. It’s unlikely anyone believes they will. The price adjustments occurring now will be small and mainly for homes that had unrealistic prices to start with… let’s face it, it should never cost $800,000 to live in Boise!

Instead of waiting for home prices to go down, prospective buyers are weighing the pros and cons and taking action now.  Many sellers are offering attractive financing packages to create a more affordable payment.  The rule is: If you can afford the payment on a 7-to-10-year fixed loan, fix your payment now and take advantage of the tax deductions that you won’t get with renting. Statistically, most homeowners move every 13 years according to the National Association of Realtors.

Take a look at the recent data from the Mortgage Bankers Association (MBA), which proves all of the above to be correct.

Tax Breaks for Homebuyers

High demand for rentals continues to drive rent prices up with zero deduction to the tenant, while building wealth for the property owner.  It is no secret that one of the cornerstones of building wealth is investing in real estate.  Anyone looking for tax breaks should consider buying a home instead of renting.

Homeowners can take advantage of several tax deductions including:

  • Mortgage Interest Deduction
    Homeowners can deduct interest paid on a loan related to building, purchasing, or improving their primary home up to $750,000.
  • Mortgage Points Deduction
    Homebuyers pay “points” to their lender when they take out a mortgage. These points are a form of prepaid interest paid up-front in exchange for a lower interest rate. In most instances, mortgage points are fully deductible the year they’re paid.
  • State and Local Taxes (SALT) Deduction
    The SALT deduction allows property owners to deduct payments made for property taxes and income or sales tax payments up to $10,000.

Housing Affordability

For renters, the choice to buy often comes down to affordability. Average rent for a vacant unit in Orange County jumped to $2,570 per month in 2022, up 18.5% from the spring of 2021. Most Southern California renters are already paying more than they would for a 30-year mortgage. This makes a 7-to-10-year fixed mortgage a feasible option for many renters.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

 

 

 

 

2021 Southern California Housing Market Forecast

2021 Southern California Housing Market Forecast

Despite economic hardships and stay-at-home orders, the California housing market finished 2020 on a high note with median home prices reaching record highs and homes selling at impressive speed. This momentum has carried into 2021 as home prices in Southern California continue to rise driven by low mortgage rates, increased buyer interest, and shortage of available inventory.

Throughout 2020, as families spent more time at home, many realized their current living space did not meet the changing needs of their family. This led to an influx of buyers looking to upgrade.

Fierce Competition Drives Home Prices Up in California

Low housing inventory in California has made competition extremely fierce. Homebuyers in California have shown they’re willing to pay more for what they want. In March, California home prices reached record highs with almost two-thirds of homes selling above their asking price according to the California Association of Realtors (C.A.R.).

In February, 2021, single family home sales were up 19.7 percent from the previous year. Median home price in California sat at $758,990 in March, 2021. This is 23.9 percent higher than the previous year. Despite rising prices, homes are moving almost 46% faster than they did in 2020. 8 days was the median time on the market in March, 2021.

It’s not just resale homes selling quickly in California. New construction homes are selling fast as well. In fact, home builders are having a hard time keeping up with demand. Sales concessions are becoming obsolete and bidding wars are becoming more common, driving up prices in every region of the state.

Buyer or Seller’s Market?

In addition to monitoring home prices and trends in the California housing market, C.A.R. also tracks the amount of time it will take for home buyers to purchase all available homes on the market. In March, C.A.R. listed the Unsold Inventory Index (UII) at 1.6 months. This is a sharp decline from the previous year when the UII sat at 2.7 months. Whenever available housing inventory drops under 2 months, it is considered a “Seller’s Market”.

California Remains One of the Hottest Markets in the U.S.

Rising home prices and high demand aren’t likely to change anytime soon. Price trends recorded by Zillow show that that between 2012 and 2019, the median home price in California appreciated by almost 108%. California home prices have risen 11% in the last year alone and were forecasted to increase 9% in 2021.  As more homebuyers enter the market and the number of available homes go down, it’s expected that home prices will continue to rise.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.